Social Security - Trust and Estate Planning Law Office

Navigating the New Retirement Landscape: Social Security, Medicaid, and Financial Planning for a Secure Future

With prices and inflation rising as a result of the COVID-19 pandemic, disruptions in global supply chains, and the war in Ukraine, more retirees than ever before are returning to work. Some might find their retired life unappealing, while others feel their expertise can still be shared. The majority of retirees, however, are returning because they simply cannot make ends meet. As the cost of healthcare, housing, and basic necessities rise, many find that their savings or monthly income are insufficient to support their daily costs. This does, however, raise questions about Social Security and Medicaid. Those of full retirement age might be eligible for Social Security and Medicaid benefits, depending on a variety of financial and health-related factors, but those who return to work do run the risk of having their benefits reduced or taken away depending on their income and any private coverage they receive from a place of employment. Planning for Social Security and Medicaid are important factors to consider when drawing up a retirement plan, as qualification for benefits can be tricky to determine and acceptance into either program is not guaranteed. Financial planning, including asset protection and estate planning, are also important when considering retirement, as planning ahead with realistic goals in mind will help avoid future financial hardship or the feeling that one is a burden to their family. Consulting with an experienced elder planning attorney will help inform one’s planning, such as an appropriate retirement age or monthly saving’s goals.

Social Security and Medicaid

Upon reaching full retirement age, currently calculated as between 65 and 67, qualified retirees are eligible for Social Security retirement benefits without any deductions based on current earnings. Similarly, qualified retirees of full retirement age are eligible for Medicaid benefits based on income methodologies employed by the supplemental security income program of the Social Security Administration. Qualified individuals may begin collecting social security and Medicaid benefits before full retirement age, although coverage will likely be reduced unless their qualification is not dependent on age. Social security and Medicaid provide, among other things, health coverage, disability insurance, and assistance with the cost of prescription drugs. One can begin receiving partial social security benefits before their full retirement age, but their partial benefits will be reduced based on the Social Security annual earnings limit, currently set at $21,240. These reductions continue until the month before a person reaches full retirement age.

Returning to work after retiring is a tricky prospect because this may affect one’s qualification for partial or full social security and Medicaid benefits. Income is a key factor when determining the coverage and benefits a retiree is eligible for from both Social Security and Medicaid. While social security benefits are not deducted for current income about full retirement age, the benefits are aimed at those of lower income or without any stable income stream. In the case of Medicaid, yearly household income is a key factor in determining one’s eligibility, so any income above thresholds for eligibility set by Medicaid may result in one having some or all of their coverage taken away. Going back to work after retirement, especially for those above their calculated full retirement receiving social security or Medicaid benefits, is not a prudent financial plan, even if a job provides better health coverage.

Financial and Estate Planning for Later Life

Medical emergencies, long-term treatment costs, and prescription drug costs are, among other physical considerations, a reality for most retirees. There is also the simple fact that retirees will, for the most part, still be paying their bills for housing, groceries, and electronics, among other things. Even with help from family, and the benefits and coverage provided by social security and Medicaid, retirees will increasingly find themselves with bills they cannot afford to pay. Planning for retirement, therefore, is a key aspect of ensuring that one’s later years are spent comfortably and without the stresses of potentially having to return to work or becoming a burden on family.

Planning for things such as Medicaid coverage are best done before one reaches their full retirement age. Protecting one's assets and creating an estate plan will also be of great help when determining a plan for retirement, as an experienced estate planning and asset protection lawyer will help one to ensure they have a steady income for retirement and still qualify for Medicaid coverage. Social security and Medicaid are tools to help you in your later life, but comprehensive estate plans are important to ensure that you have a plan for emergencies.

You have worked your entire life to ensure that your later years are spent enjoyably and that you can leave a financial legacy to your family, so ensure that you engage in retirement planning as soon as possible. To speak with New York’s most experienced elder planning attorney, please call the Trust and Estate Planning Law Office at (718) 333-2395.

Can Creditors Take My Social Security Checks?

Creditors generally cannot seize Social Security benefits, even if they have sued you and obtained a court judgment against you. However, there are some limited exceptions to this rule for certain types of government debts which are detailed below.

Are Social Security benefits protected by law?

Yes. Creditors cannot garnish or confiscate Social Security benefits, whether they be retirement, disability, survivor's benefits, or SSI, with the exception of certain federal agencies. This safeguard has been codified into law by Congress. This means that conventional creditors, such as credit card companies, medical collectors, and loan businesses, are prohibited from taking Social Security benefits if it is evident that the money they want is Social Security income.

Does it matter if the creditor has sued me in court?

No. Even if the creditor obtains a court judgment against you, these rights apply. You may not be able to pay the judgment with Social Security funds if the court rules against you. As a result, if you are sued for a debt, it is critical that you do not enter into any agreed orders or judgments that require you to pay a debt with your Social Security benefits.

Do these protections exist if the Social Security money is deposited into a bank account?

Yes. Once funds are placed in a bank, they are protected against garnishment or confiscation. The Court, on the other hand, must be able to distinguish between exempt and non-exempt funds.

If the Court cannot tell whether money is Social Security income from your documents and bank statements, the Court will most likely rule that none of the money is exempt. If Social Security income is directly deposited into a bank account, the statement will reflect a deposit from the United States Treasury at about the same time each month. To make it evident that the Social Security Administration is the only source of funds in the account, the direct deposit from the US Treasury should be the only deposit reported on the bank statement each month. This will show creditors and a court that the money in your bank account is protected income.

What if a collection agency threatens to take my Social Security?

By making false assertions, the collection agency may be breaking the Fair Debt Collection Practices Act (a federal law that regulates collection agencies). Only if the creditor or collection agency knows that your only source of income is Social Security would these statements be false. You should seek legal assistance if you believe you have legal claims against the collecting agency.

Can government agencies take my Social Security benefits?

Yes, but only under limited circumstances.

First, SSI (Supplemental Security Income) cannot be taken at all, unless the Social Security Administration is trying to correct incorrect past payments.

Only federal agencies may try to take Social Security benefits. Examples of some things the federal agencies can try to take your Social Security benefits for are:

Federally subsidized student loans.
Other loans owed to, or subsidized by the government.
Food stamp overpayments.

Can the federal agency take my whole Social Security payment?

No, a government agency can only take a portion of your Social Security check each month.

The first $750 per month (or $9000 per year) is not confiscatable. As a result, if your monthly benefits are less than $750, your benefits cannot be taken.

Can I protest the government’s action?

Yes. You have the right to get written notice in advance if the government plans to "offset" (take a portion of) your Social Security income. If you believe you do not owe the money, you have the right to a hearing. You might want to seek legal counsel. Another option is to work out a payment plan with the government entity that is threatening to withhold your Social Security income.

Can I get rid of the government debt in bankruptcy?

Yes, in a lot of circumstances. However, there are certain noteworthy exceptions, such as:

Student debts are normally non-dischargeable, and income taxes can only be forgiven in certain situations.
If the person or entity to whom you owe the money establishes you collected the obligation by false pretenses or fraud, the debt will not be dismissed.

If you need an experienced attorney to review your financial circumstances and the nature of debts to help you decide the best course of action, please contact the Law Office of Inna Fershteyn at (718) 333-2395.

Why Elder Law Attorneys Aren’t Just For Seniors?

An Elder Law Attorney serves as an advocate for the elderly and their loved ones when it comes to the legal issues related to healthcare and financial assets. Individuals who have reached an old age or are approaching the 65 benchmark should consider hiring an Elder Law attorney to assist them with the matter of retirement, social security, Medicaid, long term care planning, guardianship, disability, etc. An Elder Care Attorney will address the importance of creating an estate plan composed of a will, trust, health care proxy, power of attorney, and letter of intent in order to effectively prepare for the future. There are numerous benefits to hiring an Elder Law attorney, some of which include guidance in long term care planning, assistance in creating a durable power of attorney, aid in receiving Social Security benefits, and protection against elder abuse. Elder Law Attorneys are specialists in their field, as they have much experience handling similar cases related to the specific needs of seniors. The attorney will utilize a holistic approach in ensuring that the key issues pertaining to long-term care, housing, well-being, and financial asset protection adhere to the wishes of the elderly individual. In terms of requiring assistance in creating trusts and wills for an elderly loved one, an esteemed Elder Attorney will be able to guarantee that the documents have the individual’s best interests at heart. The lawyer will work with you to protect your assets in the best manner possible to ensure that necessary payments are made on the home and other personal costs, while making sure that there is no form of financial exploitation of assets that could harm your loved ones.

Benefits to Hiring and Elder Care Attorney:

1)Guidance in long term care planning

In the case that an individual’s physical and mental health declines, a long-term care facility is typically the most effective plan of care for the individual. When considering which long-term care facility is most effective for your loved one’s needs be sure to also note that the payment plan for this facility is within your price range. An Elder Care Attorney can assist you in obtaining long-term care insurance that will help cover the expenses of care, as prices are on the rise in NY. In the case that long-term care insurance is out of your financial budget, an Elder Care Attorney can assist in qualifying for Medicaid. You are guaranteed to make the best long term care decision possible for your loved one if you seek proper instruction and assistance from an experienced attorney.

2)Assistance in creating a durable power of attorney

A durable power of attorney serves to grant a third party the ability to make decisions and take actions on behalf of the individual who has become incapacitated, as they are no longer able to make decisions independently. An Elder Care Attorney prefers a durable power of attorney rather than just the typical power of attorney because the durable document remains functional even after the individual loses the ability to make decisions for themselves. On the contrary, the typical document would only function if the individual has not become mentally incapacitated. An attorney will guide you through the process of filling out this document to ensure that your future is well planned for.

3) Aid in receiving Social Security Benefits

An Elder Care Attorney works to guarantee that you are receiving all of the benefits you deserve based on your current age and overall health. Once you reach the age of 67 you are subject to receive the full Social Security benefits. If you have reached this age and are not receiving your full benefits, an attorney will advocate on your behalf and work to grant you your benefits. If you have a disability and are subject to receive disability benefits, then the attorney will assist you in obtaining those benefits by following a similar legal procedure. According to NY State regulations, Social Security Disability Insurance (SSDI) guarantees that you may begin collecting benefits after 6 months since the start of your disability. With the support of an esteemed Elder Care Attorney, you will certainly receive all of the benefits you rightfully deserve.

4)Protection against elder abuse

With the current foundation, research has shown that many elderly residents in nursing homes are facing unjust treatment. An Elder Care Attorney will work with you by representing your loved ones who have been the victims of physical violence, emotional mistreatment, or financial fraud. The attorney will not just provide guidance on the following steps, but will ensure that justice is served and your loved one will never be treated in this manner ever again. The attorney will advocate for the rights of your loved one to guarantee that they are being properly cared for and looked after, especially during these troubling and challenging times.

So, In Sum, Why Elder Law Attorneys Aren’t Just For Seniors?

Elder Law Attorneys work to assist individuals in creating a plan for their future to ensure that the individuals interests and best wishes are clearly declared. These individuals are not always seniors. As a matter of fact, it is recommended that you hire an Elder Care Attorney prior to the age of 65. It is always better to be prepared for anything, rather than procrastinate on preparing for your future. Many individuals fall victim to the assumption that they have an unlimited period of time left to get all of their assets and legal information together. The unfortunate truth is that life is inexplicable and unexpected events can occur at any point in time. In the case that an individual does not have an elder care in place prior to the point in time when they biome incapacitated, then their loved ones must embark in the costly and lengthy process of earning the legal authority to act on their loved one’s behalf. It is encouraged that you avoid waiting because the guardianship legal procedures associated with waiting too long to create an elder care plan are very complex and expensive. If individuals do not take the time to create a will, then they will not be able to decide how they would like their assets to be distributed or how their minor children would be cared for. The court would then be responsible for distributing your assets and estates, which may not align with your wishes. It is certainly better to be well prepared ahead of time, rather than at a loss when the time comes. Make the decision today to protect yourself and your loved ones by hiring an Elder Care Attorney to draft all of your legal documents and create a plan for the future.

For Elder Care inquiries please contact the Law Office of Inna Fershteyn at 718-333-2395 to best prepare your legal documents for the future.